Biofuel Tax Incentives extended
Last night, the Iowa House of Representatives voted 88 – 6 to extend several important state tax incentives for homegrown renewable fuels, like ethanol and biodiesel through 2024. The bill previously passed the Iowa Senate 49 – 0.
“We commend the Iowa legislature for its overwhelming support in taking this important step to continue Iowa’s leadership in renewable fuels,” stated Iowa Renewable Fuels Association (IRFA) Policy Director Grant Menke. “Extending these tax incentives supports Iowa jobs, cleaner air, competition in the fuel marketplace and Iowa’s motorists through lower fuel prices.”
Included in legislation that is now headed to Governor Terry Branstad for final approval is an extension of two retailer tax credits for ethanol blends. The E85 Promotion Tax Credit, available for fuel blends containing 70 to 85 percent ethanol, was extended at 16 cents per gallon. The E15 tax credit, available for fuel blends containing 15 to 69 percent ethanol, was extended at 3 cents per gallon from September 16 through May 31, and 10 cents per gallon from June 1 through September 15 to help alleviate the summertime blending issues for registered E15.
The forward-thinking legislation also included an extension and adjustment of the Biodiesel Blended Fuel Retailer Tax Credit. While the incentive will continue at 4.5 cents per gallon for retailers offering a biodiesel blend containing a minimum of 5 percent biodiesel (B5) through 2017, from 2018 through 2024 it will then provide a 3.5 cents per gallon incentive on B5, and a 5.5 cents per gallon credit on B11, or diesel blended with a minimum of 11 percent biodiesel.
According to a recent IRFA study, Iowa’s renewable fuels industry accounts for more than $4.6 billion of Iowa GDP, generates $2.3 billion in income for Iowa households and supports more than 43,000 jobs throughout all sectors of the Iowa economy.
Iowa is the nation’s leader in renewable fuels production. Iowa has 43 ethanol refineries capable of producing 4 billion gallons annually, including nearly 55 million gallons of annual cellulosic ethanol production capacity. In addition, Iowa has 12 biodiesel facilities with the capacity to produce nearly 315 million gallons annually.
The Iowa Renewable Fuels Association was formed in 2002 to represent the state’s liquid renewable fuels industry. The trade group fosters the development and growth of the renewable fuels industry in Iowa through education, promotion, legislation and infrastructure development.